Quick Tip #2 – Great news…

As of today the conforming loan limit in Los Angeles and Orange County was increased to $729,750.00

This means that you can get conforming rates and the best pricing available on loan amounts up to $729,750.00

Although this was announced months ago, and the FHA had already updated these loan limits; most banks didn’t role out the increase to loan limits until today.

Are you a real buyer?

One of the many points I will try to address through this blog is that buyers should only be working with a lender they can trust.  However, trust is a two way street and must also be earned by the client.  A question that all house hunters should be asking themselves is  “Am I a real buyer”?

What I mean by a ‘real buyer’ is as follows.  Are you the type of buyer who is going to find a local real estate agent to work with, apply for a loan,  and also get your lender all the documentation they need up front in order to get a loan approval?  Are you the type of buyer who is going to actually make an offer if you find a property you love?  Furthermore, are you going to be committed to that deal and work towards closing escrow?

For reasons I have yet to precisely identify, people like shopping for houses without any intention of actually buying a property.  This leads them to shop for a loan which they have no intention of ever obtaining.  All this work combines to create a sluggish, and even overwhelmed real estate buying process.  This bogged down system penalizes those buyers who are serious about home ownership.  Continue reading »

Quick Tip #1 – Don’t borrow money to borrow money

With interest rates so low on secured and unsecured debt… it’s tempting for clients to borrow money from credit cards, lines of credit, or IRA loans in order to fund their earnest money escrow deposit and/or their full down payment for the purchase of a home.

Before you do this, PLEASE check with your lender.  Many loan programs do not allow for borrowed funds to be used as a down payment source.  Gift funds are usually OK… but funds cannot be borrowed. Continue reading »

What is an FHA loan?

An FHA loan is a government backed security which allows an entire spectrum of borrowers to get into their primary home for less than 20% down.

Contrary to popular belief, an FHA loan is NOT just for low income housing projects, buyers with bad credit, or borrowers who make very little money.

In fact, you can still take advantage of an FHA loan regardless of the amount of money you make, where you are going to live, or what your credit score is.  I’ve done FHA loans for clients with 640 credit scores and 820 credit scores.  I’ve done FHA loan for individuals living on a fixed social security income of $1,700 a month, and I’ve done FHA loans for investment bankers making $40,000 a month.  Although the current FHA structure only allows for a max loan amount (in Los Angeles County) of $729,750.00,  I’ve done FHA loans for clients in both Compton and and Beverly Hills.

An FHA backed loan is truly is a great product for any client seeking to put down less than 20%… Continue reading »

Hardest loan I’ve ever done… signing today

Today is a pretty good day.  One of the hardest loans I’ve ever gotten approved is signing loan documents today.

Thanks to an FHA backed loan which was fully underwritten and poses limited risk to the bank; a client with 3.5% down, very troubled credit, and $100 in her checking account gets to own a house by Friday.

It took three months, a very understanding realtor, the continued patience of all parties involved, and a $35,000 gift from the clients family… but in the end, the deal closed.

The first step was to get a gift from the family large enough to pay off all of the clients unsecured debt.  By paying off a total of $10,000 in credit card debt, and closing the correct accounts, we were able to raise the clients credit score by over 100 points.  This alone made the underwriter feel much more confident about the deal.

Second, we showed that the client made more than enough money to service the debt of the new house.  We explained that the borrower had not been a good saver due to her student loan obligations and unsecured credit card debt which had recently been paid off in full.

I feel good that  it’s a solid loan that was fully underwritten, poses little risk of ever going into foreclosure, and allows a young lady to become more financially secure.  Furthermore, the client now gets to keep more of her earnings due to the tax benefits of owning versus renting.

Today is a pretty good day.

As always, if you need information on starting a new loan for the purchase or refinance of your home, contact me at  TrustYourLender@gmail.com